Trouble for property lawyers....

Chief Executive of County Solicitors, and a specialist property lawyer with over 23 years' experience in the industry, Ed Foster sets out his views on two landmark cases here:

As property lawyers, we're used to undertaking various tasks during the course of a property transaction, in addition to the actual property stuff:

* environmental consultants* tax collectors for HMRC, etc.

Following a couple of recent Court of Appeal decisions, it looks as if we may now also have to undertake the task of investigating potential property fraud and making decisions about that during the course of a transaction (something which is, quite frankly, better suited to the Police or the National Crime Agency).

Both recent cases, Dreamvar and P&P, involved a property fraud where a criminal (C) duped a victim (V) by faking his identity, and then ran off with the sale proceeds for a house C didn't even own.

C, in both cases, instructed solicitors to act for him and they undertook their usual ID checks, which "proved" that C was who he said. Indeed, it is notable, in both cases, that the Court found that the solicitors involved hadn't acted negligently and hadn't actually caused the loss.

However, in both cases, V lost a lot of money and the Court decided that someone had to pay. It wasn't fair that V should be out of pocket.

The Court then took the somewhat bizarre step of saying that the Solicitors in both cases should pay for the losses, since they were better placed to do so, holding indemnity insurance. So, is that "fair" or "equitable"? I suggest not.

A claim on your Solicitors' Professional Indemnity Insurance policy isn't like a "Get Out of Jail Free" card - the Solicitors end up paying, both in terms of their annual insurance excess (which could run to thousands of pounds) and also, the fact that the Solicitors' renewal premium for the next four years is likely to increase substantially, to go towards offsetting the costs that the insurers have paid out.

That can't be right, whichever way you look at it. Unsurprisingly, both cases are likely to find their way by means of appeal to the Supreme Court, the top domestic Court in the UK, who will make the final decision.

Until then, expect your property lawyers to provide you with a detailed disclaimer, limiting their liability in such cases - and also, you will undoubtedly have to jump through hoops to prove who you really are.